Defensive Tactics Vis-À-Vis Hostile Takeovers: An Indian Perspective

Merger and acquisition (“M&A”) activity in India is booming. A hostile takeover is an acquisition directly to the business owners and manufacturers to replace management and get the transaction accepted of one business by a new company. India has experienced only a handful of hostile takeover attempts. Hostile takeovers have been rare and will likely continue to be rare in the immediate future, but not for the reasons typically proffered. On the regulatory side, the Indian Takeover Code does not erect any insurmountable obstacles to hostile acquisitions, and recent liberalizations by the Government of India make foreign acquisitions of Indian companies in most industrial sectors possible without material government approvals. Hostile takeovers of Indian companies are now a real possibility. And these Indian companies, unlike their counterparts in the United States, are particularly susceptible to hostile acquisitions, as Indian law prevents them from utilizing takeover defenses such as the poison pill and staggered board. Despite the lack of a prohibiting framework for a hostile takeover, India seems to persist in its shyness from engaging in these corporate blood-battles. One of the reasons for such hesitance may be located in how our corporate houses have traditionally been structured. This article focuses on the lacunas today in the hyperspectral world of digital investment and M & A deals, inspecting the Indian regulations and suggesting how it can made more iron clad and companies given more ammo vis-à-vis defense tactics by taking example from different countries. The article bridges the gap between years old research articles and India positioning itself as a prime marketplace for investment according to the latest trends.